TELEPHONE COOPERATIVE

Transcription

1 It shall be the aim of Twin Lakes Telephone Cooperative Corporation to provide dependable area wide telephone service on the cooperative plan and at the lowest cost consistent with sound economy and good management. OF TWIN LAKES TELEPHONE COOPERATIVE CORPORATION ARTICLE 1 Membership SECTION 1. Requirements for Membership. Any person, firm, association, corporation, or body politic or subdivision thereof may become a member of Twin Lakes Telephone Cooperative Corporation (hereinafter called the Co-op ) by: (a) Making a written application for membership therein; (b) Agreeing to purchase from the Co-op telephone service as herein after specified; (c) Agreeing to comply with and be bound by the Charter of Incorporation and bylaws of the Coop and any rules and regulations adopted by the Board of Directors (hereafter called the Board ); and (d) Agreeing to pay the membership fee hereinafter specified on uniform terms and conditions established by the Board; provided, however, that agreement to pay or payment of the membership fee in accordance with the provisions of these bylaws by a landlord on behalf of an applicant for membership who is a tenant occupying premises owned by such landlord and served by the Co-op shall constitute compliance by such applicant with subdivision (d) of this Section; and provided further, however, that no person, firm, association, corporation or body politic or subdivision thereof shall become a member unless and until he or it has been accepted for membership by the Board or the members. No member may hold more than one voting membership in the Co-op, and no membership shall be transferable, except as provided in these bylaws. Beginning six months after the date of incorporation, all applications received more than thirty days prior to each meeting of the members which have not been accepted or which have been rejected by the Board shall be submitted by the secretary to such meeting and, subject to compliance by the applicant with the requirements hereinabove set forth, any such application may be accepted by the vote of the members. The secretary shall give each such applicant at least ten days written notice of the date of the members meeting to which his application will be submitted and such applicant shall be entitled to be present and heard at the meeting. 36 SECTION 2. Member Certificates. Membership in the Co-op shall be evidenced by a membership certificate which shall be in such form and shall contain such provisions as shall be determined by the Board. Such certificates shall be signed by the President and by the secretary and the corporate seal shall be affixed thereto. No membership certificate shall be issued for less than the membership fee fixed in these bylaws, nor until such membership fee has been fully paid for. In case a certificate is lost, destroyed or mutilated, a new certificate may be issued therefore upon such uniform terms and indemnity to the Co-op as the Board may prescribe. SECTION 3. Joint Membership. A membership issued to either spouse of a marriage is deemed to be held jointly by the two and subject to their compliance with the requirements of Section 1 of this Article, may be accepted for such membership for the purpose of voting. The term member as used in these bylaws shall be deemed to include a husband and wife, holding a membership and any provisions relating the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership. Without limiting the generality of the foregoing, the effect of the hereinafter specified actions by or in respect of the holders of a joint membership shall be as follows: (a) The presence at a meeting of either or both shall be regarded as presence of one member and shall constitute a joint waiver of notice of the meeting; (b) The vote of either separately or both jointly shall constitute one joint vote; (c) A waiver of notice signed by either or both shall constitute a joint waiver; (d) Notice to either shall constitute notice of both; (e) Expulsion of either shall terminate the joint membership; (f) Withdrawal of either shall terminate the joint membership; (g) Either but not both may be elected or appointed as an officer or director, pro vided that both meet the qualifications for such office. SECTION 4. Conversion of Membership. (a) A membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and his or her spouse to comply with the charter of incorporation, bylaws and any rules and regulations adopted by the Board. The outstanding membership certificate shall be surrendered, and shall be reissued by the Co-op in such manner as shall indicate the changed membership status. (b) Upon the death of either spouse who is a party to the joint membership such membership shall be held solely by the survivor. The outstanding membership certificate shall be surrendered, and shall be reissued in such manner as shall indicate the changed membership status, provided, however, that the estate of the deceased shall not be released from any debts due the Co-op. SECTION 5. Membership and Service Con nection Fees. The membership fee shall be Ten ($10.00) Dollars without variance as to members, upon payment of which a member shall be eligible for one main station service connection. Additional charges shall be paid for each connection, extension, and other available service, upon the premises, in accordance with the rules and regulations prescribed by the Board. SECTION 6. Purchase of Telephone Service. Each member shall, as soon as telephone service is available, take telephone service from the Co-op to be used on the premises specified in his application for membership, and shall pay monthly at rates which shall from time to time be fixed by the Board; provided however, that the Board may limit the amount of telephone service which the Co-op shall be required to furnish to any one member. It is expressly understood that amounts paid for telephone service in excess of the cost of service are furnished by the members as capital and each member shall be credited with the capital so furnished as provided in these bylaws. Each member shall pay to the Coop such minimum amount per month for telephone service as shall be fixed by the Board from time to time. Each member shall also pay all amounts owed by him to the Co-op as and when the same shall become due and payable. SECTION 7. Service to Non-Members. The Co-op shall render service to its members only; provided, however, that service may be rendered to nonmembers not in excess of five (5%) percent of the number of its members. Twin Lakes 18 Prelims.indd 36 5/14/2018 1:29:46 PM

2 SECTION 8. Termination of Membership. (a) Any member may withdraw from membership upon compliance with such uniform terms and conditions as the Board may prescribe. The Board may, by the affirmative vote of not less than two-thirds of all the directors, expel any member who fails to comply with any of the provisions of the charter of incorporation, bylaws, or any rules or regulations adopted by the Board, but only if such member shall have been given written notice by the Secretary that such failure makes him liable to expulsion and such failure shall have continued for at least ten days after such notice was given. Any expelled member may be reinstated by vote of the Board or by vote of the members at any annual or special meeting. The membership of a member who has not permitted the installation of service within thirty (30) days after he has been notified service is available to him, or of a member who has ceased to purchase telephone service from the Co-op, shall be cancelled by resolution of the Board. (b) Refunds may be made to any member or personal representative of a member at anytime under the conditions prescribed by the Board, the articles of incorporation, bylaws and loan contract upon discontinuance of membership. (c) Transfer of membership may be made to a person desiring telephone service under the terms of the published policy prescribed by the Board of Directors. (d) Any refund of membership fees pursuant to the above subsections shall be in the order in which memberships shall have been terminated. Prior to the repayment of a membership fee paid by the member, the Co-op shall deduct from the amount of such membership fee, the amount of any debts owing from the member of the Co-op. ARTICLE II RIGHTS AND LIABILITIES OF MEMBERS SECTION 1. Property Interest of Members. Upon dissolution, after (a) all debts and liabilities of the Co-op shall have been paid, (b) all capital furnished through patronage shall have been retired as provided in these bylaws, and (c) all membership fees shall have been repaid, the remaining property and assets of the Co-op shall be distributed among the members and former members in the proportion which the aggregate patronage of each member bears to the total patronage of all such members, unless otherwise provided by law. SECTION 2. Non-Liability for Debts of the Co-op. The private property of the members shall be exempt from execution or other liability for the debts of the Co-op and no member shall be liable or responsible for any debts or liabilities of the Co-op. ARTICLE III MEETING OF MEMBERS SECTION 1. Annual Meeting. The annual meeting of the members shall be held on the 1st Saturday of October of each year, beginning with the year 1962, at such place in the County of Jackson, State of Tennessee, as shall be designated in the notice of the meeting, for the purpose of electing directors, passing upon reports for the previous fiscal year and transacting such other business as may come before the meeting. It shall be the responsibility of the Board to make adequate plans and preparations for the annual meeting. SECTION 2. Special Meetings. Special meetings of the members may be called by resolution of the Board, or by not less than 200 members or ten per centum of all members, whichever shall be the lesser, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. Special meetings of the members may be held at any place within the County of Jackson, State of Tennessee, specified in the notice of the special meetings. SECTION 3. Notice of Members Meetings. Written notice stating the place, day and hour of the meeting and, in case of a special meeting or an annual meeting at which business requiring special notice is to be transacted, the purpose or purposes for which the meeting is called, shall be delivered not less than ten days nor more than twenty days before the date of the meeting, either personally or by mail, by or at the direction of the secretary, or upon a default in duty by the secretary, by the persons calling the meeting, to each member. If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail, addressed to the member at his address as it appears on the records of the Co-op, with postage thereon prepaid. The failure of any member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such meeting. SECTION 4. Quorum. As long as the total number of members does not exceed five hundred, ten per centum of the total number of members present in person shall constitute a quorum. In case the total number of members shall exceed five hundred, fifty members present in person, whichever shall be larger, shall constitute a quorum. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice. The minutes of each meeting shall contain a list of the members present in person. SECTION 5. Voting. (a) ELECTION OF DIRECTOR/ DIRECTORS UNCON TESTED If the election for a director or director s seat is not contested, the election of the said director or directors will be by voice vote at the annual meeting. (b) ELECTION OF DIRECTOR/ DIRECTORS CONTESTED The persons elected as board members shall compose the board until their successors shall have been elected and shall have qualified. If an election of board members shall not be held on the day designated herein for the annual meeting, or at any adjournment thereof, a special meeting of the members shall be held for the purpose of electing board members within a reasonable time thereafter. The board members shall be elected by a plurality vote of the members present. SECTION 6. Proxies. There shall not be any voting by proxy at any meeting of the membership of the Cooperative nor shall proxy voting on any office or issue be permitted or contemplated in these bylaws. SECTION 7. Order of Business. The order of business at the annual meeting of the members and, so far as possible, at all other meetings of the members, shall be essentially as follows except as otherwise determined by the members at such meeting: 1. Report on the number of members present in person in order to determine the existence of a quorum. 2. Reading of the notice of the meeting and proof of the due publication or mailing thereof, or the waiver or waiver notice of notice of the meeting, as the case may be. 3. Reading of unapproved minutes of pre vious meetings of the members and the taking of necessary action thereon. 37 Twin Lakes 18 Prelims.indd 37 5/14/2018 1:29:47 PM

3 4. Presentation and consideration of reports of officers, directors and committees. 5. Election of directors. 6. Unfinished business. 7. New business. 8. Adjournment. ARTICLE IV DIRECTORS SECTION 1. General Powers. The business and affairs of the Co-op shall be managed by a board of 11 directors which shall exercise all of the power of the Co-op except such as are by law, the charter of incorporation or these bylaws conferred upon or reserved to the members. SECTION 2. Election and Tenure of Office. At each annual meeting of the members, beginning with the year 1962, the 11 directors shall be divided into three classes, the classes to be composed of directors, with the term of office of the 4 directors of the first class to expire at the next succeeding annual meeting; and the term of the second class to expire at the second succeeding annual meeting; and the term of the third class to expire at the third succeeding annual meeting. At each annual meeting, four (4) or three (3) directors shall be elected to hold office for three (3) years. Further, any director or directors appointed to fill a vacancy or vacancies that may have occurred since the last annual meeting (see Vacancies-Article IV, Section 6) will be elected for the remainder of the unexpired term of the replaced director or directors, and filing of such vacancy or vacancies shall be by a member from the area where the vacancy or vacancies occurred. The directors, classified as aforesaid, shall be elected by ballot, by and from the members to serve as herein above provided, or until their successor, or successors, shall have been elected, and shall have qualified, subject to the provisions of the bylaws with reference to the removal of directors. SECTION 3. Qualifications. No person shall be eligible to become or remain a director of the Co-op who: (a) is not a member and is not presently residing in the area served or to be served by the Co-op; or, (b) is any way employed by, affiliated with, or financially interested in: 1. a competing enterprise with the coop erative or in any entity in which the cooperative has an interest; or, 2. is employed by or owns a competing business or (supplies products or services to the cooperative or its subsidiaries) 38 business selling telephone services, video services, or any business selling material amounts of supplies, products, or services to the cooperative or its subsidiaries. The Board may, by general rule or in particular circumstances, determine which interests in competing enterprise are material; or, 3. is engaged in the construction or maintenance; including right-of-way maintenance of the lines of the cooperative; or, (c) does not have the capacity to enter into a legally binding contract; or, (d) is or has been an employee of the Cooperative within three (3) years of date of the annual meeting at which the Director takes office; or, (e) is closely related to an incumbent Director or an employee of the Cooperative. As used here, closely related means a person who is related to the principal person by consanguinity or affinity, to the second degree or less that is, a person who is either a spouse, child, grandparent, parent, brother, sister, aunt, uncle, nephew, or niece, by blood or in-law, of the principal. However, no incumbent Director shall lose eligibility to remain a Director or to be reelected as a Director if he or she becomes a close relative of another incumbent Director or of a Cooperative employee because of a marriage to which he was not a party; neither shall an employee lose eligibility to continue in the employment of the Cooperative if he or she becomes a close relative of a Director because of a marriage to which he or she was not a party; or, (f) who was discharged from employment at the Cooperative for just cause or disciplinary reasons; or, (g) has been or is convicted of or pled guilty to a felony. Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, the Board shall remove such director from office. Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the Board. SECTION Notice of Directors to be Elected. Not less than thirty (30) days prior to the first Friday in April, the Secretary of the Cooperative or his/her designee, shall give written notice of the Directors whose terms shall expire and which group of Directors as set forth in Article IV, Section 2 shall be voted on. Such notice shall be by mail to all members eligible to vote at the billing address reflected on the Cooperative s records. Such notice shall include the places where qualifying petitions and other information as determined by the Board may be obtained for the purpose of qualifying as a candidate for a Director. SECTION Qualifying Petitions. In order for a member to become a qualified candidate for election as Director, he/she shall file with the Secretary of the Cooperative or with a duly appointed representative a written petition nom inating such person as a candidate and signed by the candidate and not less than fifteen (15) other members in good standing. Such other information as the Board deems necessary or appropriate to determine the eligibility of the candidate shall be filed with the petition. The petition and other information shall be made available at each Business Office of the Cooperative, and shall be filed with the Secretary or his designee between the first Friday in April to the first Friday in July of each year. SECTION Directors Credentials Com mittee. The Chairman of the Board or the Vice-Chairman, when appropriate, shall appoint not more than five (5) Directors to serve as a Credentials Committee to pass upon the eligibility of a member to become a candidate. This committee shall be appointed by the first Friday in August. The Credentials Committee shall meet as necessary to elect a Chairman and review the petitions and accompanying documents to determine if a member is a qualified candidate for a Director. The Committee shall immediately thereafter notify in writing each and every member who filed a petition of its findings and shall certify to the Secretary of the Cooperative its findings. In the exercise of its responsibility, the Committee shall have available to it the advice of counsel provided by the Cooperative. Any protest or objection to not being qualified shall be filed with the Committee in writing within three (3) business days next following delivery of the notification of non-eligibility. Upon request of same the Committee shall thereupon be reconvened, upon notice from its Chairman, not less than seven (7) business days after such protest or objection is filed. The Committee shall hear such evidence as is presented by the protestor(s) or objector(s), who may be heard in person, by counsel, or both, an any opposing evidence: and the Committee, by vote of a majority of those present and voting, shall immediately after such hearing, render its decision. The Committee may not act on any matter unless a majority of the Committee is present. The Committee s decision on all matters covered by this Section shall be final. The report or certificate of its decision shall constitute prima facie evidence of the facts stated therein. SECTION 5. Removal of Directors by Members. Any member may bring charges against a director Twin Lakes 18 Prelims.indd 38

4 and, by filing with the secretary such charges in writing, together with a petition signed by at least ten per centum of the members, or two hundred members, whichever is the lesser, may request the removal of such director by reason thereof. Such director shall be informed in writing of the charges at least ten days prior to the meeting of the members at which the charges are to be considered and shall have an oppor tunity at the meeting to be heard in person or by counsel and to present evidence in respect of the charges; and the person or persons bringing the charges against him shall have the same opportunity. The question of the removal of such director shall be considered and voted upon at the meeting of the members and any vacancy created by such removal may be filled by vote of the members at such meeting, without compliance with the foregoing pro visions with respect to nominations. SECTION 6. Vacancies. Vacancy or vacancies occurring in the board of directors, except as provided in Section 5 of this Article IV hereof, shall be filled by the affirmative vote of the majority of the remaining directors, and those directors selected shall serve until the next annual meeting, or until their successors shall have been elected and qualified, provided that in the event the vacancy or vacancies is not filled by the board within sixty (60) days after the vacancy or vacancies occur, the members shall have the right to fill such at a meeting of the members without compliance with the provisions in respect of nominations. SECTION 7. Compensation. Board members shall not receive any salary for their services as such, except that members of the Cooperative may by resolution authorize a fixed sum for each day or portion thereof spent on Cooperative business, such as attendance at meetings, conferences, and training programs or performing committee assignments when authorized by the board. If authorized by the board, board members may also be reimbursed for expenses actually and necessarily incurred in carrying out such Cooperative business or granted a reasonable per diem allowance by the Board in lieu of detailed accounting for some of these expenses. The mem bers of the Board of Directors shall be entitled to the same fringe benefits paid the employees. No board member shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a board member receive compensation for serving the Cooperative, unless the payment and the amount of compensation shall be specifically authorized by a vote of the members or the service by the board member or his close relative shall have been certified by the board as emergency measure. For the purpose of this section, close relative includes grandparents, parents, husband, wife, children, grandchildren, brothers, sisters, uncles, aunts, nephews, and nieces, by blood, by marriage or by adoption, and spouses of any of the foregoing. SECTION 8. Directorate Areas. For the purpose of election of directors, the area served by the Cooperative is hereby divided into six (6) directorate areas as follows: Area No. One Jackson County. Area No. Two Clay County. Area No. Three Overton County. Area No. Four Pickett County. Area No. Five Fentress County. Area No. Six shall consist of Baxter, Cookeville South and Chestnut Mount exchanges. Voting for the election of directors and all other matters that may require the consent of the members will be held in Clay County, Fentress County, Jackson County, Overton County, Pickett County and Putnam County. Each area election shall be held at some reasonable central location within the area. The voting procedures will be established by the Board of Directors of the Cooperative. ARTICLE V MEETINGS OF DIRECTORS SECTION 1. Regular Meetings. A regular meeting of the Board shall be held without notice, immediately after, and at the same place as, the annual meeting of the members. A regular meeting of the Board shall also be held monthly at such time and place in Jackson County, Tennessee, as the Board may provide by resolution. Such regular monthly meeting may be held without notice other than such resolution fixing the time and place thereof. SECTION 2. Special Meetings. Special meetings of the Board may be called by Board resolution, by the President, or by any three (3) Directors, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided in Section 3. The Board, the President, or the Directors calling the meeting shall fix the date, time and place for the meeting. Special meetings may also be held via telephone conference call, without regard to the actual location of the Directors at the time of such a telephone conference meeting, if all Directors consent thereto in writing either before or after such meeting. The Directors may take any action by written consent that may be taken at a special meeting. SECTION 3. Notice of Directors Meeting. Written notice of the time, place, and purpose or any special meeting of the Board shall be delivered to each director not less than five days previous there to either personally or by mail, by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the President or the directors calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail addressed to the director at his address as it appears on the records of the Co-op, with postage thereon prepaid. SECTION 4. Quorum. A majority of the Board shall constitute a quorum, provided, that if less than such majority of the directors is present at said meeting, a majority of the directors present may adjourn the meeting from time to time, and provided further, that the secretary shall notify any absent directors of the time and place of such adjourned meeting. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. ARTICLE VI OFFICERS SECTION 1. Number. The officers of the Co-op shall be a President, Vice President, Secretary, Treasurer, and such other officers as may be determined by the Board from time to time. The offices of Secretary and of Treasurer may be held by the same person. SECTION 2. Election and Term of Office. The officers shall be elected by ballot, annually by and from the Board at the meeting of the Board held immediately after the annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the Board following the next succeeding annual meeting of the members or until his successor shall have been elected and shall have qualified. Except as otherwise provided in these bylaws, the vacancy in any office shall be filled by the Board for the unexpired portion of the term. SECTION 3. Removal of Officers and Agents by Directors. Any officer or agent elected or appointed by the Board may be removed by the Board whenever in its judgment the best interests of the Co-op will be served thereby. In addition, any member of the Co-op may bring charges against an officer, and by filling with the Secretary such charges in writing, together with a petition signed by ten per centum of the members, or two hundred members, whichever is the lesser, may request the removal of such officer. The officer against whom such charges have been brought shall be informed in writing of the charges at least ten days prior to the Board meeting at which the charges are to be considered and shall have an opportunity at the meeting to be heard in person or by counsel and to present evidence in respect of the charges; and the person or persons 39 Twin Lakes 18 Prelims.indd 39

5 40 bringing the charges against him shall have the same opportunity. In the event the Board does not remove such officers, the question of his removal shall be considered and voted upon at the next meeting of the members. SECTION 4. President. The President shall: (a) be the principal executive office of the Co-op and, unless otherwise determined by the members of the Board, shall preside at all meetings of the members and the Board; (b) sign, with the secretary, certificates of membership, the issue of which shall have been authorized by the Board of the members, and may sign any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the Board to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these bylaws to some other officer or agent of the Co-op, or shall be required by law to be otherwise signed, or executed; and (c) in general perform all duties incident to the office of President and such other duties as may be prescribed by the Board from time to time. SECTION 5. Vice President. In the absence of the President, or in the event of his inability or refusal to act, the Vice President shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice President shall also perform such other duties as from time to time may be assigned to him by the Board. SECTION 6. Secretary. The secretary shall: (a) keep the minutes of the meetings of the members and of the Board in one or more books provided for the purpose; (b) see that all notices are duly given in accordance with these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the Co-op and affix the seal of the Co-op to all certificates of membership prior to the issue thereof and to all documents, the execution of which on behalf of the Co-op under its seal is duly authorized in accordance with the pro visions of these bylaws; (d) keep a register of the names and post office addresses of all members; (e) sign, with the President, certificates of membership, the issue of which shall have been authorized by the Board or the members; (f) have general charge of the books of the Co-op; (g) keep on file at all times a complete copy of the charter of incorporation and bylaws of the Coop containing all amendments thereto (which copy shall always be open to the inspection of any member) and at the expense of the Coop, forward a copy of the bylaws and of all amendments thereto to each member; and (h) in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the Board. SECTION 7. Treasurer. The treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the Co-op; (b) be responsible for the receipt of and issuance of receipts for all monies due and payable to the Co-op and for the deposit of all such monies in the name of the Co-op in such bank or banks as shall be selected in accordance with the provisions of these bylaws; and (c) in general perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the Board. SECTION 8. Manager. The Board may appoint a manager who may be, but who shall not be required to be, a member of the Co-op. The manager shall perform such duties and shall exercise authority as the Board may from time to time invest in him. SECTION 9. Bonds of Officers. The Treasurer and any other officer or agent of the Co-op charged with the responsibility for the custody of any of its funds or property shall give bond in such sum and with such surety as the Board shall determine. The Board in its discretion may also require any other officer, agent or employee of the Co-op to give bond in such amount and with such surety as it shall determine. SECTION 10. Compensation. The powers, duties and compensation of officers, agents and employees shall be fixed by the Board, subject to the provisions of these bylaws with respect to compensation for directors and close relatives of directors. This section shall be interpreted so as to be in harmony with Article IV, Section 7. SECTION 11. Reports. The officers of the Co-op shall submit at each annual meeting of the members reports covering the business of the Co-op for the previous fiscal year. Such reports shall set forth the condition of the Co-op at the close of such fiscal year. SECTION 12. Vacancies. Except as otherwise provided in these bylaws, a vacancy in any office may be filled by the Board of Directors for the unexpired portion of the term. ARTICLE VII NON-PROFIT OPERATION SECTION 1. Interest or Dividends on Capital Prohibited. The Co-op shall at all times be operated on a cooperative, non-profit basis for the mutual benefit of its patron. No interest or dividends shall be paid or payable by the Co-op on any capital furnished by its patrons. SECTION 2. Patronage Capital in Connection with Furnishing Telephone Service. In the furnishing of telephone service, the Co-op s operations shall be so conducted that all patrons, members and nonmembers alike, will through their patronage furnish capital for the Co-op in order to induce patronage and to assure that the Co-op will operate on a nonprofit basis, the Co-op is obligated to account on a patronage basis to all its patrons, members and non-members alike, for all amounts received and receivable from the furnishing of telephone service in excess of operating costs and expenses properly chargeable against the furnishing of telephone service. All such amounts in excess of operating costs and expenses at the moment of receipt by the Co-op are received with the understanding that they are furnished by the patrons, members, and nonmembers alike, as capital. The Co-op is obligated to pay by credits to a capital account for each patron all such amounts in excess of operating costs and expenses. The books and records of the Co-op shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron, and the Co-op shall within a reasonable time after the close of the fiscal year notify each patron of the amount of capital so credited to his account. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obli gation to do so, and the patron had then furnished the Co-op corresponding amounts for capital. In event, of dissolution or liquidation of the Co-op, after all outstanding indebtedness of the Co-op shall have been paid, outstanding capital credits shall be retired without priority on a pro rata basis before any payments are made on account of property rights of members. If, at any time prior to dissolution or liquidation, the Board shall determine that the financial condition of the Co-op will not be impaired thereby, the capital then credited to the patrons accounts may be retired in full or in part. In no event, however, may any such capital be retired unless, after the proposed retirement, the capital of the Co-op shall equal at least fifteen per centum (15%) of the total assets of the Co-op. Twin Lakes 18 Prelims.indd 40

6 Capital credited to the account of each patron shall be assignable only on the books of the Co-op, pursuant to written instruction from the assignor and only to successors in interest or successors in occupancy in all or a part of such patron s premises served by the Co-op unless the Board, acting under policies of general application, shall determine otherwise. Notwithstanding any other provision of these bylaws, the Board, at its discretion, shall have the power at any time upon the death of any patron, if the legal representatives of his estate shall request in writing that the capital credited to any such patron be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the Board acting under polices of general application, and the legal representatives of such patrons estate shall agree upon; provided, however, that the financial condition of the Co-op will not be impaired thereby. The patrons of the Co-op, by dealing with the Coop, acknowledge that the terms and pro visions of the charter of incorporation and bylaws shall constitute and be a contract between the Co-op and each patron, and both the Co-op and the patrons are bound by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the bylaws shall be called to the attention of each patron of the Co-op by posting in a conspicuous place in the Co-op s office. ARTICLE VIII DISPOSITION OF PROPERTY The Co-op may not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is authorized at a meeting of the members thereof by the affirmative vote of not less than two-thirds of all members of the Co-op, and unless the notice of such proposed sale, mortgage, lease or other disposition or encumbrance shall have been contained in the notice of the meeting; provided, however, that notwithstanding anything herein contained, the Board, without authorization by members thereof, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust upon, or the pledging or encumbering of, any or all of the property assets, rights, privileges, licenses, franchises and permits of the Co-op, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom all upon such terms and conditions as the Board shall determine, to secure any indebtedness of the Co-op to the United States of America or any instrumen tality or agency thereof; or to the Rural Telephone Finance Cooperative, the National Rural Utilities Cooperative Finance Corporation, or other financing institution organized for the benefit of Rural Utility Systems; provided further that the Board may upon the authorization of a majority of those members of the Co-op present at a meeting of the members thereof, sell, lease, or otherwise dispose of all or a substantial portion of its property to another Co-op or foreign corporation doing business in this State pursuant to the Act under which this Co-op is incorporated. ARTICLE IX SEAL The corporate seal of the Co-op shall be the form of a circle and shall have inscribed thereon the name of the Co-op and the words Corporate Seal of Tennessee. ARTICLE X FINANCIAL TRANSACTIONS SECTION 1. Contracts. Except as otherwise provided in these bylaws, the Board may authorize any officer or officers, agent or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Co-op, and such authority may be general or confined to specific instances. SECTION 2. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, and all notes, bonds or other evidences of indebtedness issued in the name of the Co-op shall be signed by such officer or officers, agent or agents, employee or employees of the Co-op and in such manner as shall from time to time be determined by resolution of the Board. SECTION 3. Deposits. All funds of the Co-op shall be deposited from time to time to the credit of the Co-op in such bank or banks as the Board may select. SECTION 4. Change in Rates. Written notice shall be given to the Administrator of RUS of the United States of America not less than ninety days prior to the date upon which any proposed change in the monthly rates charged by the Co-op for telephone service becomes effective. SECTION 5. Fiscal Year. The fiscal year of the Coop shall begin on the first day of January of each year and shall end on the thirty-first day of December of the same year. ARTICLE XI SECTION 1. Membership in Other Organi za tions. The Cooperative may become a member or purchase stock in other profit or nonprofit organizations, associations, partnerships or joint ventures when the Board finds that the general or long-term interests of its membership will be served by such investments or participation. SECTION 2. Waiver of Notice. Any member or director may waive in writing any notice of a meeting required to be given by these bylaws The attendance of a member or director at any meeting shall constitute a waiver of notice of such meeting by such member or director, except in case a member or director shall attend a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened. SECTION 3. Rules and Regulations. The Board shall have power to make and adopt rules and regulations, not inconsistent with law, the charter of incorporation or these bylaws, as it may deem advisable for the management of the business and affairs of the Co-op. SECTION 4. Accounting System and Reports. The Board shall cause to be established and maintained a complete accounting system which, among other things, and subject to applicable laws and rules and regulations of any regulatory body, shall conform to such accounting system as may from time to time be designated by the Administrator of RUS of the United States of America. The Board shall also after the close of each fiscal year, cause to be made a full and complete audit of the accounts, books and financial condition of the Co-op as of the end of such fiscal year. Such audit reports shall be submitted to the members at the next following annual meeting. ARTICLE XII AMENDMENTS These bylaws may be altered, amended or repealed by the members at any regular or special meeting, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal. 41 Twin Lakes 18 Prelims.indd 41